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Performance Management 05_10_2001.ppt CONFIDENTIAL
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
Performance Management
Peter Stangl
Sr. Manager
Supplier Development Operations (SDO)
May 10, 2001
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Performance Management 05_10_2001.ppt CONFIDENTIAL
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
Five Key Factors for Lean Enterprise Success (1)
1) A Strategic Vision
2) Strong Line Management
3) Expert Training and Support
4) Aggressive Performance Targets
5) Impatience
1) Lean Transformation, by B. Henderson and J. Larco
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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A Strategic Vision
Top management must be able to see how the company will be different
Vision must be held firmly in mind, and communicated to management and staff throughout the organization
Shared vision all are working toward
1) “Lean Transformation”, by B. Henderson and J. Larco
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Strong Line Management
Leaders of the transformation must be chosen carefully Must have imagination to grasp the “what can be” Must be able to focus on the future and the possibilities it
holds, rather than on the past and its time-honored traditions
1) Lean Transformation, by B. Henderson and J. Larco
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Expert Training and Support
May require seasoned lean transformation expert to help in at least the initial, start-up and training phase
After training, those left in charge should have enough knowledge to be self-correcting and lead project core team(s)
Use of steering committee as a sounding board for the core team(s)
1) Lean Transformation, by B. Henderson and J. Larco
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Aggressive Performance Targets
People need to know what is expected of them This might take the form of goals and objectives to shoot for
1) Lean Transformation, by B. Henderson and J. Larco
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Impatience
Impatience by management to see the organization move ahead and deliver tangible results
Impatience means foot-dragging will not be tolerated In its most productive form, impatience should translate into a
fire that is lit under the organization to realize the vision
1) Lean Transformation, by B. Henderson and J. Larco
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
Performance Management 05_10_2001.ppt CONFIDENTIAL
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
Five Key Factors for Lean Enterprise Success (1)
1) A Strategic Vision
2) Strong Line Management
3) Expert Training and Support
4) Aggressive Performance Targets
5) Impatience
1) Lean Transformation, by B. Henderson and J. Larco
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
Performance Management 05_10_2001.ppt CONFIDENTIAL
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Why Aggressive Performance Targets?
Proactive key process indicators (KPIs) and an Annual Operating Plan (AOP) are suggested methods of tracking a plant’s metrics. Develop KPIs that calibrate the effectiveness and efficiency of the new lean processes. The object is to track the sustainability of process improvements.
If metrics begin to fall off, a maintenance project must be developed to avert a cycle of improvement followed by a backsliding in performance.
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Possible Metrics (Balanced Score Card)
Output - To Customer Quality On Time Delivery Finished Goods Inventory
Internal Efficiency Scrap Labor Effectiveness Cycle Time Floor Space Workplace Organization Work In Process Inventory Overall Equipment Effectivess
Continuous Improvement Employee Suggestions adopted Kaizens Implemented Rate of Improvements
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Suggested Format for
Performance Review
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Application
By Plant By Product Line Monthly Cross Functional Team
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Tactical MetricsProject Metrics and Cost SavingsOn-time Delivery Inventory- Weekly Trend of FGsQuality PPM (13 and 5 weeks)Manufacturing Cycle TimeCapacity
Production System Score by site
Strategic ImprovementsFuture State Value Stream MapSupplier Quality Road Map
SummaryWhat has been doneWhat needs to be done
Performance Management Meeting
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Sample of Performance Data Review
Company Name:
CATEGORY METRIC GOAL BASELINE ACTUAL MO. 1ACTUAL MO. 2ACTUAL MO. 3 ACTUAL MO. 4 ACTUAL MO. 5 COST BENEFITDate Date Date Date Date Date
Data AMAT Business Revenue ($$) N/AData Direct Labor Rate (include benefits, etc.) N/A
AOP On Time Delivery (PPM)AOP Quality (PPM)AOP Avg. Lead Time (Internal) **
KPI Data Montly Revenue($)KPI Data Raw Material Inventory (RMI)($) $0.00KPI Data Work In Process (WIP) ($) $0.00KPI Data Finish Goods Inventory (FGI) ($) $0.00KPI Data Throughput(One Day's output) ($)KPI Data Monthly Labor Burden(hrs)KPI Data Montly Overtime Burden (hrs)
Capacity # of jobs processed (given time period) $0.00Capacity # Processes (Equipment) $0.00Capacity # Headcount (Labor) * $0.00
Misc 5S Team $0.00Misc Safety/Ergonomics - If Applicable $0.00Misc Floorspace - If Applicable $0.00Misc Specific Kaizen - If Applicable $0.00
Definitions* Headcount is Direct Labor Only and INCLUDES overtime** Avg. Lead Time = Upfront Cycle Time + Material Cycle Time + Mfg Cycle Time
OTHER DATA (Not all may be applicable)Overhead Costs Building Rent, Utilities, Maintenance, Insurance, etc.Cleanroom/Non-Cleanroom Costs $$ per square footInventory Burden Carrying Cost PercentageCost of Direct Labor (per person) $$ per hour (includes wages, taxes, insurance, benefits, etc.)Percentage of business Percentage of Line business to total businessPull History of P/N's - Finished Goods Minimum 13 weeks Pull History by part number - Finished GoodsPull History of P/N's - Raw Materials Minimum 13 weeks Pull History bypart number - Raw MaterialsCost Per P/N $$ per P/N PiecePlant Layout (drawing) Drawing of Plant Layout Contract P/N List (Type 1 & 5) List of Type 1 & 5 Contract P/N's (SMO)Direct Ship P/N List Contract P/N's that are Direct Ship (Carl Rossi)Forecast of P/N's Rolling Forecast for P/N'sContract Liablity for P/N's Contract Min/Max requirements by P/NP/N Process Steps Mfg process steps for each P/NP/N Lot Sizes (Internal/External) P/N Lot Sizes both Internal and External (Secondary Processing)
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Delivery PPM by Site
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
1 MO 2 MO 3 MO 4 MO 5 MO 6 MO 7 MO 8 MO 9 MO 10 MO 11 MO 12 MO
Months
De
leve
ry P
PM
Monthly PPMs Goal PPM fit (exponential)
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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13 & 5 Wks Quality PPM’s by Site
0
1000
2000
3000
4000
5000
6000
1 2 3 4 5 6 7 8 9 10 11 12
Month
Qu
ali
ty P
PM
Quality PPM 5 wks Quality PPM 13 wks Goal (600 PPM)
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Total Cycle Time Metric by Site/Value Stream
0
1
2
3
4
5
6
7
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Date
we
eks
Cycle Time Goal
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Weekly Trend - %Min Finish Goods
0
20
40
60
80
100
120
week
1
week
3
week
5
week
7
week
9
week
11
week
13
week
15
week
17
week
19
week
21
week
23
week
25
week
27
week
29
week
31
week
33
week
35
week
37
week
39
week
41
week
43
week
45
week
47
week
49
week
51
Date
FG
Pe
rce
nt
FG (percent) BTP Average Goal FG Trendline (ln fit)
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Weekly Backorder by Line Item
0
1
2
3
4
5
6
7
8
9
week
1
week
3
week
5
week
7
week
9
week
11
week
13
week
15
week
17
week
19
week
21
week
23
week
25
week
27
week
29
week
31
week
33
week
35
week
37
week
39
week
41
week
43
week
45
week
47
week
49
week
51
Date (weekly)
# L
ine
s o
f P
art
s
Lines of backordered parts Trendline (Exp fit)
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Production System Score
•Baseline Score _______________________ 459
•Current Score ________________________ 575
•Project Target Score ___________________ 683
Exam
ple
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Capacity
Capacity Review Should Include– Facilities– Equipment– Material & Supply Base– Labor both Direct and Indirect
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Current/Future State Value Stream Map
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Sample Improvement Roadmap
AOP GOALS Quality PPM: Delivery PPM: Cycle Time:
Orig
Completion StatusImprovement Activity Status
What goal w ill this
improvement impact ?
COMMENTS ( Provide Details for Red or Yellow Status) Note: Use
additional sheets if more space is needed
ACTUAL Quality PPM: Delivery PPM: Cycle Time:
Act
Next Level Detail?
Project/Task Owner
Planned Start Date
Planned Completion
Date
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Green - On Target Yellow - At Risk
Red - Will be Late
Qu
alit
y
Del
iver
y
Cyc
le T
ime
Improvement Activity
COMMENTS ( Provide Details for Red or Yellow Status) Note: Use
additional sheets if more space is needed
Issue / Problem Planned Remedy
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Improvement Roadmap
Defect Pareto
0204060
80100120
nick
cut
tear
brok
en
eaten
slippe
ryug
lybu
gs
Nu
mb
er o
f P
arts
0204060
80100120
Cu
mu
lati
ve P
erce
nt
Number Cumulative % of tot
Parts Pareto
0
20
40
60
80
100
120
nick cut tear broken eaten slippery
Nu
mb
er o
f D
efec
ts
0
20
40
60
80
100
120
Cu
mu
lati
ve P
erce
nt
Number Cumulative % of tot
Defect Part # Description Qty. Discrepancy Root Cause ECD Corrective Action
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Performance Review
•Summary
•Next Steps
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Performance Management 05_10_2001.ppt CONFIDENTIAL
T H E I N F O R M A T I O N A G E S T A R T S H E R E ™
You Own Your Performance
Primary supplier owns quality, delivery, cycle time to AMAT, You were awarded the business with this understanding.
Special Process Suppliers Sub-tier suppliers Transportation/Distribution
Excuses
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Performance Management 05_10_2001.ppt CONFIDENTIAL
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Questions ?
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